Evergreen Investments is eyeing commercial mortgage-backed securities as well as some individual corporate names for additional investments, said Jim Dulin, v.p. and director of fixed-income trading in Charlotte, N.C. He works with customized accounts for the manager, which has $53 billion in largely investment-grade fixed-income in separately managed accounts. "We like CMBS, because you can be buying a double- or triple-A 10-year cheaper than a Baa3 corporate," he noted. He uses customized benchmarks and therefore declined to specify his MBS and CMBS allocations.
Dulin added while Evergreen is "tactically underweight corporates," the manager has a positive outlook on the sector. He is concerned about a pick-up in shareholder friendly behavior such as share buybacks, but overall thinks corporations will do well this year and that foreign demand for corporate paper will remain strong. He declined to be more specific.
Dulin highlighted individual credits Evergreen likes, noting he is currently concentrating on the following names, to which some of its accounts do not have exposure: Aegon in insurance; AEP Utilities; in telecom, he likes AT&T Corp., Sprint Corp., SBC Communications and France Telecom SA. Among the banks, the manager is eyeing J.P. Morgan, Citigroup and The PNC Financial Services Group. Among brokers, Evergreen finds Goldman Sachs and Morgan Stanley attractive. In cable, Dulin likes Comcast Corp. and Cox Communications. He added Evergreen is overweight cable and media by about 5%. He declined to further detail his allocations.
Dulin added most of Evergreen's separately managed accounts are five-years and in. He said its duration is short its indices with "bogeys between 90-100% of the index" because he thinks rates will continue to rise. He believes the Federal Reserve will continue to take a measured approach, raising rates by 25 basis points at the next two meetings and bringing rates to 3-3.5% by the end of the year.
